Analyst Conference First Half of 2021
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Analyst Conference First Half of 2021
Gunnar Groebler, Chairman of the Executive Board
Burkhard Becker, Chief Financial Officer
SZAG Investor Relations
Frankfurt, August 11, 2021
english
Gunnar Groebler 1 Sustainability and Strategy
Burkhard Becker 2 Economic Development and Financials
SZAG Investor Relations
english
Sustainability and Strategy
Occupational safety – work-related accident per person rate
18
16 16.8
15.7 Occupational safety is a high-ranking corporate
14 14.7
12
13.4 target next to profitability, productivity and quality
12.6 2020: 11,33
10 Reduction of injury rate through measures and
8
campaigns to enhance workplace safety
6 5.6 6.3
4.9
3.9
4
2.8
2 2.8
1.1 1.0 0.7 0.7
0
Jan + Feb Mrz Apr Mai Jun
WA rate annualized WA rate monthly WA rate accrued
Work-related accident per person rate = Number of accidents with more than one day off work / number of employees * 1,000
SZAG Investor Relations
Groupwide goal of the occupational safety policy is: Zero Accidents
english
3
Sustainability and Strategy
Vaccination campaign #hüttengeimpft
12,000
10,000
Vaccine doses
8,000
6,000
4,000
2,000
0
Calendar week 20 21 22 23 24 25 26 27 28 29 30 31
SZAG Investor Relations
Salzgitter Group actively contributes to overcoming the COVID-19 pandemic –
more than 10,000 doses of vaccine administered per calendar week 31!
english
4
Sustainability and Strategy
Contribution towards decarbonization – highlights of the first half 2021
Groundbreaking for the
Commitment to the GetH2 initiative µDRAL direct reduction plant
First delivery of green strip steel products
for the serial production to Mercedes-Benz
MOU for joint research on optimization
of iron ore supply for DRI plants Commissioning of Salzgitter Wind Hydrogen
SZAG Investor Relations
Strong focus on decarbonization continues in 2021
english
5
Sustainability and Strategy
SALCOS® – Gradual conversion to a H2-based steel production
Today Indicative: 2025+ Indicative: 2030+ Indicative: until 2050
Status Quo Pilot phase Completion
CO2-Emissions (8 m t/a)
- 30% CO2
DRP
- 50% CO2
- 83% bis > - 95% CO2
(Stage I) (Stage II)
Blast Furnaces
EAF
Electrolyzer
Basic Oxygen Furnaces
(Stage III)
SZAG Investor Relations
Status Quo Stage I Stage II Stage III
english
EAF= Electric Arc Furnace DRP= Direct Reduction Plant 6
Sustainability and Strategy
Green steel – current environment
Marketable Fundable Economically viable
Already today certified production Funding for a major part of the Higher prices for green steel in the
and delivery of green steel capex requirements applied for via short-term as a result of added
In addition, strong interest from the EU and Federal/State programs, green value and supply shortage
customers underpinned with binding response by In the medium- to long-term higher
memoranda of understanding for the end of 2021 competitiveness of green vs. gray
green steel via the hydrogen route Acquired CO2 emission steel due to CO2 regulations and
Natural gas as bridge technology allowances serve as additional rising prices
allows for significant CO2 reduction security
until green H2 is available to the
necessary extent
We resolutely strive to realize our ambition to produce green steel at the Salzgitter site by the end of 2025
in order to bolster our strong competitive ability and clear commitment to the green transformation
SZAG Investor Relations
We have very good preconditions for a successful transformation towards green steel
english
7
Sustainability and Strategy
EU crude steel: Green vs. Gray
Expected main drivers
Green Steel Gray Steel
Short-term: Price premium in the EU due to Medium- to long-term: significant additional burden as a
supply shortage and added green value result of decreasing EU allocation of CO2-emission
allowances and rising CO2 prices
Medium- to long-term: Price premium will diminish following
an increase of the supply and a decrease of production costs Long-term: Lower to no demand as a result of substitution
as a result of the scale effect and level of maturity effects from gray to green steel, high cost pressure as
demand decreases
SZAG Investor Relations
Higher competitiveness for steel via direct reduction versus blast furnace route expected;
in the long run Gray Steel made in Europe will be obsolete!
english
8
Sustainability and Strategy
Value of the acquired CO2 emission allowances
Market value CO2 emission allowances
1.000
750
€ million
500
250
0
3Q 16 1Q 17 3Q 17 1Q 18 3Q 18 1Q 19 3Q 19 1Q 20 3Q 20 1Q 21
SZAG Investor Relations
Acquired CO2 emission allowances have reached a market value of almost € 1 billion!
english
9
Sustainability and Strategy
Update: feasibility study for the direct reduction of iron ore at Wilhelmshaven
Study Project partners
Construction of a direct reduction plant with an upstream
hydrogen electrolyzer as well as
Developing necessary infrastructure for supplying it with raw
materials, natural gas and hydrogen at the deep-water port of
Wilhelmshaven
Status
General feasibility of a 2 mt p.a. DRI plant affirmed
Wilhelmshaven has good site conditions
(deep-water port, access to renewable electricity, open
spaces…)
SZAG Investor Relations
No “either/or decision”– SALCOS® will be expedited at the Salzgitter site;
we generally support Wilhelmshaven as green energy hub and location for a direct reduction plant
english
10Sustainability and Strategy
Update investment projects
Ilsenburger Grobblech: New heat treatment line
Optimization of the product portfolio
Expansion of the market position and volume expansion for higher
value grade segments such as high strength and wear resistant, water
tempered steel
Commissioning: 2021
Current status: Trial operation, first deliveries to customers
Salzgitter Flachstahl: Hot-Dip Galvanizing Line 3
Qualitative growth in the strip steel business
Reinforcement of the market position in the automotive segment
Strengthening of the premium segment for auto customers
Commissioning: 2022
Current status: Installation of equipment
SZAG Investor Relations
Realization of major investment projects to grow in terms of quality progresses well!
english
11Sustainability and Strategy
Strategy review initiated
FitStructure 2.0 (2019-)
FitStructure 2.0: Of a total of around
Salzgitter AG 2021 (2016-2021) € 300 m in earnings improvement
potential € 160 m realized per
June 30, 2021
A further € 100 m in additional
Development of new Group strategy (H2 2021) earnings contribution to be
expected from Salzgitter AG 2021
New Group strategy (2022-)
2021 2022
SZAG Investor Relations
Presentation of the new Group strategy expected for early 2022
english
12Sustainability and Strategy
Strategy review: key points
Strategy Portfolio Efficiency
Who and what do we What is the right How do we generate
want to be in business portfolio for additional efficiency
2025/2030? our strategy? gains across the
entire value chain?
Enabler
Management structures and instruments, organization of the Group,
corporate culture
SZAG Investor Relations
Review of the four main areas has started
english
13Gunnar Groebler 1 Sustainability and Strategy
Burkhard Becker 2 Economic Development and Financials
SZAG Investor Relations
englishEconomic Development and Financials
Order intake of steel consumers
Order intake of selected branches of the German industrial sector (Jan. 2018 = 100)
130
120
110
100
90
80
70
60
50
40
30
Jan 18 Apr 18 Jul 18 Oct 18 Jan 19 Apr 19 Jul 19 Oct 19 Jan 20 Apr 20 Jul 20 Oct 20 Jan 21 Apr 21
Construction Mechanical engineering Metal processing Automotive
SZAG Investor Relations
After dramatic slump of order intake during the COVID pandemic recovery to pre-crisis levels
english
Source: Bundesbank, last figure from June 2021, construction sector from May 2021 15Economic Development and Financials
Raw materials and steel prices
Raw Materials Hot rolled coil & Heavy Plate
Iron ore Coking Coal 1,300 1,165
(62% Fe CFR China, US$/dmt) (FOB Australia, US$/t)
250 184 300 1,200
217
1,100
250 1,000
200 Ø 188 Ø 941
Ø 207 900 Ø 854
200
Ø 177 800
150
Ø 144 700
150
Ø 614
Ø 109 Ø 124 600 Ø 556
100 Ø 93 Ø 504
Ø 69 100 500 Ø 560
Ø 474 Ø 472
400 1,050
50 50
300
Jan' 18 Jul' 18 Jan' 19 Jul' 19 Jan' 20 Jul' 20 Jan' 21 Jul' 21
Average 2018 Average 2019 Average 2020 Northern Europe HRC ex. Ruhr Northern Europe Heavy Plate ex. Ruhr
SZAG Investor Relations
Diverging raw material price development – coking coal prices recently surged, iron ore prices decreased;
steel prices stagnate at record levels following dynamic development
english
Source: Platts 16Economic Development and Financials
Key data
H1 2021 H1 2020 Δ Q2 2021 Q1 2021
Crude steel production kt 3,377.6 2,952.7 424.9 1,733.1 1,644.5
External sales1 € million 4,435.5 3,631.0 804.5 2,341.4 2,094.1
Earnings before tax € million 305.7 -127.8 433.5 188.4 117.3
Earnings after tax € million 230.6 -144.7 375.3 154.1 76.6
Earnings per share (undiluted) € 4.20 -2.70 6.90 2.82 1.38
ROCE % 16.4 -6.3 22.7 20.1 13.2
Core workforce2 22,414 23,009 -595 22,414 22,475
SZAG Investor Relations
Salzgitter Group continues its upward trajectory, delivering a strong result in the second quarter
english
1 only from entities within the Group of Consolidated Companies of Salzgitter Group 2 per reporting date 17Economic Development and Financials
Strip Steel
Order intake Consolidated sales Earnings before taxes
2,500 1,400 150
2,235 1,200
2,000 1,198
100
104.5
1,834 1,000
1,500 903 50
€ million
€ million
800
kt
600
1,000 0
400
500 -50
200 -69.2
0 0 -100
H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021
SZAG Investor Relations
Outstanding profit contribution boosted by higher shipments and selling prices at record levels towards the end of
the first half of 2021
english
18Economic Development and Financials
Plate / Section Steel
Order intake Consolidated sales Earnings before taxes
1,200 500 50
1,101 450 40
1,000 446
400 30
966
350 363 20
800
300 10
€ million
€ million
kt
600 250 0
200 -10
-27.0 -26.9
400
150 -20
100 -30
200
50 -40
0 0 -50
H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021
SZAG Investor Relations
Gradual improvement of order activity and pricing over the course of the first half; sections with solid profit
contribution; recovery of the plate companies lags due to late-cyclical nature of the business
english
19Economic Development and Financials
Mannesmann
Order intake* Consolidated sales* Earnings before taxes
1,000 600 50
900 40
881 500 530
800 494 30
700 20
400
600 10
€ million
€ million
€ million
500 300 0
498
400 -10 -15.5
200
300 -20 -22.7
200 -30
100
100 -40
0 0 -50
H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021
* excluding EUROPIPE-Group
SZAG Investor Relations
Improved business situation at the precision tubes group, medium-diameter line pipes and the stainless steel tubes
group also registered an increase in bookings
english
20Economic Development and Financials
Trading
Shipments Consolidated sales Earnings before taxes
2,000 1,800 150
1,800 1,600
1,810 125
1,724 1,538
1,600
1,400
1,400 100
1,200
1,229
1,200
€ million
€ million
1,000 75 149.3
kt
1,000
800 50
800
600
600 25
400
400
0
200 200 -15.8
0 0 -25
H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021
SZAG Investor Relations
Very gratifying pre-tax profit as a result of the dynamic price development, along with favorable purchase prices in
the stockholding business and at the UES Group
english
21Economic Development and Financials
Technology
Order intake Consolidated sales Earnings before taxes
800 700 50
749 40
700 600 639
575 30
600
500 20 32.5
558
500
10
€ million
€ million
€ million
400
400 0
300 -10.6
-10
300
200 -20
200
-30
100 100
-40
0 0 -50
H1 2020 H1 2021 H1 2020 H1 2021 H1 2020 H1 2021
SZAG Investor Relations
KHS Group’s pre-tax result significantly outperformed the year-earlier figure also due to accounting profit achieved
by selling the pouch business; KDE Group also with profit contribution, slightly negative result of KDS
english
22Economic Development and Financials
Industrial Participations / Consolidation
Consolidated sales Earnings before taxes
100 100
90 90
80 84 80
Contribution Aurubis investment:
70 70 H1 2021: € 34.0 m
60
67
60
H1 2021: € 91.0 m
€ million
€ million
50 50
40 40
30 30 61.8
20 20
10 10 17.4
0 0
H1 2020 H1 2021 H1 2020 H1 2021
SZAG Investor Relations
Pre-tax profit includes € 91.0 million contribution of Aurubis AG, an investment included at equity
english
23Economic Development and Financials
Income statement
Income Statement (€ million) H1 2021 H1 2020 Δ
Sales 4,435.5 3,631.0 804.5
Increase/decrease in finished goods and work in process/other own
88.2 -57.2 145.4
work capitalized
4,523.7 3,573.8 949.9
Other operating income 174.9 132.9 42.0
Cost of materials 2,925.8 2,373.3 552.5
Personnel expenses 871.2 846.0 25.2
Amortization and depreciation of intangible assets and property, plant
149.9 148.7 1.2
and equipment
Other operating expenses 509.3 462.1 47.3
Result from impairment losses and reversal of impairment losses of
3.5 -8.9 12.4
financial assets
Income from shareholdings 0.6 2.1 -1.5
Result from investments accounted for using the equity method 82.5 33.3 49.2
Finance income 3.5 3.9 -0.4
Finance expenses 26.6 34.8 -8.1
SZAG Investor Relations
Earnings before taxes (EBT) 305.7 -127.8 433.5
Income tax 75.1 16.9 58.2
Consolidated result 230.6 -144.7 375.3
english
24Economic Development and Financials
Consolidated balance sheet
Assets (€ million) 2021/06/30 2020/12/31 Δ
Non-current assets 4,229.0 4,244.5 -15.5
Intangible assets, property, plant and equipment 2,424.0 2,423.6 0.4
Investment property 80.8 81.5 -0.7
Financial assets 53.1 54.6 -1.5
Investments accounted for using the equity method 1,236.5 1,169.1 67.4
Trade receivables 9.4 11.0 -1.6
Other receivables and other assets 18.3 22.3 -4.0
Income tax assets 2.2 0.5 1.7
Deferred income tax assets 404.7 481.9 -77.2
Current assets 4,771.7 3,992.9 778.8
Inventories 2,181.1 1,933.7 247.4
Trade receivables 1,416.0 923.9 492.1
Contract assets 313.3 300.2 13.1
Other receivables and other assets 244.2 188.3 55.9
Income tax assets 21.2 23.7 -2.5
Securities 49.9 0.0 49.9
SZAG Investor Relations
Cash and cash equivalents 544.6 621.4 -76.8
Assets available for sale 1.4 1.7 -0.3
Balance sheet total 9,000.7 8,237.4 763.3
english
25Economic Development and Financials
Consolidated balance sheet
Equity and liabilities (€ million) 2021/06/30 2020/12/31 Δ
Equity 2,998.5 2,678.9 319.6
Subscribed capital 161.6 161.6 0.0
Capital reserve 257.0 257.0 0.0
Retained earnings 2,902.9 2,594.5 308.4
Other reserves 37.7 26.4 11.3
Unappropriated retained earnings 0.0 0.0 0.0
Treasury shares -369.7 -369.7 0.0
Minority Interest 9.0 9.1 -0.1
Non-current liabilities 3,340.2 3,476.4 -136.2
Provisions for pensions and similar obligations 2,170.1 2,298.6 -128.5
Deferred tax liabilities 73.6 73.9 -0.3
Income tax liabilities 30.4 30.4 0.0
Other provisions 274.5 267.1 7.4
Financial liabilities 737.3 749.4 -12.1
Other liabilities 54.3 57.1 -2.8
Current liabilities 2,662.0 2,082.1 579.9
Other provisions 227.0 210.4 16.6
Financial liabilities 454.1 488.3 -34.2
Trade payables 1,231.4 802.4 429.0
SZAG Investor Relations
Liability contracts 381.0 272.8 108.2
Income tax liabilities 10.9 5.5 5.4
Other liabilities 357.6 302.8 54.8
Balance sheet total 9,000.7 8,237.4 763.3
english
26Economic Development and Financials
Cash flow statement
€ million
1,000
800
222.1 -197.7
600 -105.5
4.3
400
621.4
544.6
200
0
Cash and cash Cash flow Cash flow Cash flow Other Cash and cash
equivalents at start from operating from investment from financing equivalents at end
of period activities activities activities of period
SZAG Investor Relations
More than € 200 million cash flow from operating activities
english
27Economic Development and Financials
Salzgitter Group – Guidance
Provided that the market continues its stable development in the second half of the year despite the latent COVID-19
crisis, we affirm our forecast for the financial year 2021 that was revised upward in June and anticipate the following for
the Salzgitter Group:
an increase in sales to more than € 9 billion,
a pre-tax profit of between € 400 million and € 600 million, as well as
a return on capital employed (ROCE) that is tangibly above the previous year's figure.
Legal Note and other remarks
We make explicit reference to the fact that imponderables, including changes in the cost of raw materials, precious metal prices and exchange rates, along with global trade policy measures and their possible impact may still exert a considerable influence over
the course of the financial year.
To the extent that this presentation contains statements oriented towards or related to the future, such statements are based on our current state of knowledge and the estimates based on such knowledge made by the management of Salzgitter AG.
However, as is the case with any forecasts or prognosis, such statements are also subject to uncertainties and risks. Notwithstanding prevailing statutory provisions and capital market law in particular, we are not obligated to update this data. In particular, we
SZAG Investor Relations
shall not assume liability of any kind for knowledge and statements, as well as any acts resulting on the basis of such knowledge or statements that emanate directly or indirectly from the analysis of the data, content and correlations of this document. The
information and data made available do not represent an encouragement or invitation to buy, sell or conduct any other type of trade in securities. Salzgitter AG shall neither assume liability for direct nor indirect damages, including lost profits, arising as a
result of the utilization of the information or data contained in this document.
For computational reasons, rounding-off differences of +/– one unit (€, % etc.) may occur in the tables. This document is also available in German language. In the event of any discrepancy, the German version shall prevail.
englishYou can also read
